UPDATE 2-Brazil central bank signals another steep interest rate hike
(Adds comments by the central bank's director of economic policy)
By Alonso Soto
BRASILIA Dec 23 (Reuters) - Brazil's central bank sees inflation remaining above the 4.5 percent center of its official target for the next two years, hinting it could keep the aggressive pace of interest rate hikes to ease price increases in the future.
In its quarterly inflation report released on Tuesday, the bank lowered its 2014 economic growth forecast to 0.2 percent from 0.7 percent in its previous estimate - a long way from its initial forecast for an expansion of 2 percent.
It estimated that the economy would likely grow at an annual rate of 0.6 percent in the third quarter of 2015.
Still, the bank raised its 2015 inflation forecast to 6.1 percent from 5.8 percent previously and sees inflation easing to 5 percent in 2016.
The central bank aims to keep annual inflation at the center of the official range of 2.5 percent and 6.5 percent.
The central bank on Dec. 3 raised its Selic rate by 50 basis points to 11.75 percent, stepping up monetary tightening to battle inflation, but said that any future steps will be taken with "parsimony".
Since then, central bank officials have sounded more aggressive, reiterating that the bank will not be complacent with high inflation under pressure from a weaker Brazilian real . Continuación...